Farmer owned and globally connected -- How CHS Southwest Grain moves 40 million bushels a year
From the light brownish gray loam soil of a Taylor, N.D., wheat field to the fresh loaves of bread on a bakery shelf in China's Jiangsu Province, American wheat travels far and wide.
Farmers obviously aren't trading their products directly with local Chinese bakers, which raises the legitimate question—how does North Dakota wheat end up abroad?
"We buy the grain from local farmers," Delane Thom, general manager of CHS Southwest Grain, said. "From there we condition it, load it and ship it out. We provide services to markets that wouldn't typically be possible for local farmers on their own."
Thom outlined how one specific transport of North Dakota wheat ended up in Nantong, China.
In the example he provided, a farmer delivered his spring wheat to his local co-op facility in Taylor, where it was purchased by CHS Southwest Grain. Once Southwest Grain had enough to fill a "shuttle quantity," or 410,000 bushels, the wheat is then transported by rail to TEMCO, a CHS joint-venture export terminal in Kalama, Wash. At the export terminal, once a single commodity vessel is filled to capacity—2.5 million bushels—it begins it's 30-day travel to the port of Nantong. On arrival in Nantong, the grain is received by CHS Nantong's joint-venture facility where it is then sold on the local commodities market to customers.
In the example provided, the wheat that was grown in Taylor ultimately traveled by truck to a local Chinese flour mill and became bread.
While many people are familiar with that aspect of Southwest Grain's business, some would be surprised to learn that there is more to the business than meets the eye.
"We are structured as a co-op, and because of being in the ag industry, we tend to provide all the inputs as well," Thom said. "Harvesting the crop is kind of the last step. We're coming into the time right now where farmers are going to plant their crop and they are going to need seed and fertilizer, chemicals as well as the gas and diesel needed to get the crop in the ground."
Southwest Grain sells these products directly to farmers. From seed and fertilizers to soil testing and tissue sampling, the many valued services provided by the company are a lifeline to many a farmer.
"Seed performance is at the heart of a farm's success," Thom said. "Finding the optimal price to value for their specific operation is just the first of many agronomic decisions farmers make each season. We can offer assistance in making those decisions with our skilled agronomy staff."
With agronomists specializing in soil testing, crop scouting, crop consultations, fertilizer and chemical sales, custom application of fertilizer and chemical products, precision ag, seed sales and tissue sampling, it's no surprise that local farmers have been relying on Southwest Grain since its founding more than 35 years ago.
In May 1981, the final touches were put on the consolidating efforts to unite eight local Grain Cooperatives located in Belfield, Dickinson, Gladstone, Killdeer, New England, Regent, Richardton and South Heart. As a result of those eight cooperatives joining together, Southwest Grain was founded and the construction of the Boyle terminal began in Taylor.
That terminal today handles 40 percent of Southwest Grain's 40 million bushel volume annually.
In 1993, Southwest Grain merged with CHS, Inc. to become CHS Southwest Grain.
"We were the first regional merger to take place with CHS, Inc. and as a result, it has opened a new worldwide market to our farmers," Thom said. "CHS Southwest Grain is determined to meet the future of local production agriculture by hiring talented employees, building or acquiring assets in our trade area and adding new technology to better serve our farmers. CHS Southwest Grain is committed to returning patronage yearly to those who support the cooperative system."
The cyclical nature of farming means that Southwest Grain faces their busiest season during planting and harvesting, something that Thom said was a part and parcel of the agriculture industry.
"We continue throughout the year in the grain marketing aspect, just to try and get all this grain moved," he said. "This time of year, our biggest concerns are with providing feed for livestock."
Thom said the diversity of business provided by Southwest Grain has helped them stay above the concerns that can severely hurt the agriculture-based industry.
"We always like to think we'll see what normal is, but mother nature in itself changes that for us," he joked. "The drought had a big impact on the grain side of things because with drought comes lower production and yield. Usually a severe drought like we had two years ago can take up to two years to cycle through, and we are starting to see that happening right now."
Speaking to concerns in the agriculture industry in the coming years, Thom said he was enthusiastic and hopeful that continued advancements in science will match or surpass the growing demand for food stock.
"Probably the biggest concern looking forward is a population growth," Thom said. "People are living longer. The population growth is destined to increase by a billion people by 2050, so we have to get better at producing food somehow or someway, because if that population growth actually does happen as predicted—it won't get us there fast enough."
To learn more about CHS Southwest Grain, visit chssouthwestgrain.com.